Net loss was NT$1.1 billion (US$32 million) for the three months ended June 30, compared with net income of NT$46.4 million a year ago, the company said in a statement.

Sales, reported earlier, fell about a quarter to NT$4 billion from NT$5.3 billion.

VIA's costs increased after it settled a patent dispute with Intel, the world's biggest chipmaker, in April. The Taipei-based company's non-operating expenses climbed more than half to NT$1 billion in the second quarter from NT$615 million in the first.

"Non-operating expenses were higher than in the first quarter" because of licensing fees, said Cheng Ming-kai, an analyst with CLSA Asia-Pacific Markets in Taipei.

"I don't think this will be a one-time payment," Cheng said.

Intel settled 11 patent lawsuits pending in five countries with VIA on April 4.

The two companies, which didn't disclose financial terms, signed a 10-year agreement to license each other's products and Intel agreed not to assert its patents on some microprocessors for three years, the companies said then.

Intel gave VIA, which also sells microprocessors, a four-year license to design and sell chipsets compatible with the US chipmaker's processors in exchange for royalties.

VIA lost sales to Intel and Taiwan rivals after they introduced new products early this year, analysts said earlier.

Chipsets work with processors such as Intel's Pentium 4 to manage personal-computer functions such as memory and graphics display.

By: DocMemory
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